While the Samajwadi Party works out the contours of its political alliance with the Congress — the seatwise share in UP, for example — on the economic front, it’s been quick off the mark. Within days of meeting External Affairs Minister Pranab Mukherjee with the offer to back the government on the nuclear deal, Samajwadi Party general secretary Amar Singh sent Prime Minister Manmohan Singh two separate letters urging him to intervene in an array of economic issues: from utilisation of the country’s foreign exchange reserves to pare inflation to pricing of spectrum for telecom companies and taxing petroleum companies on their windfall profits.

In a July 4 letter to the PM, Amar Singh started off by saying the government must use the country’s $300 billion forex reserves to strengthen the rupee and thus bring inflation down. Pointing out that the rupee hit its 15-month low of 43.5 against the dollar and lost almost 12% since May, Singh said, “We have the sixth largest reserves in the world. This should be utilised to arrest further depreciation of rupee and the same time control inflation effectively.”

According to Singh, it was the Finance Minister’s prerogative and not that of the Reserve Bank of India to fix the exchange rate. “The government must act immediately to bring the exchange rate back to Rs 39 per dollar. This measure alone would bring down inflation by 2% to 4% in a very short time,” he said.

In the same letter, he reiterated his demand for imposing windfall profit tax on oil companies. Accusing the Petroleum Minister of favouring “only one well-known private operator” (read Mukesh Ambani-promoted Reliance Industries Ltd), he said the country had no choice but levy a windfall profit tax of up to 50% on both upstream and downstream operators. “This will generate instantly over Rs 1,00,000 crore,” he said. In a letter to Sonia Gandhi last month, Singh had raised the same issue mentioning Reliance Industries.

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